ANS Group Plc

December 14, 2009 02:00 ET

Interim Results for the period ended 30 September 2009


                                           ANS GROUP PLC
                                  ("ANS Group" or the "Company")

                      Interim Results for the period ended 30 September 2009


Turnover increased by 7% from £5,142,064 to £5,499,224

Operating Profit £378,533 (£379,912 2008)

Cash Reserves up from £1.5m to £1.6m after £243,000 of share buybacks

EPS 3.2p (3.5p 2008)

Dividend maintained at 1.25p per share

Annual Recurring Revenues increased by 17.6% from £3.4m to £4.0m

Total  investment  during  the period in recruitment, infrastructure and  marketing  was  £138,000
excluding additional salaries.

Increased head count of over 20%


It  gives  me great pleasure to announce the half year results to 30 September 2009. Your  company
has shown tremendous resilience during the difficult and ongoing downturn. These positive results,
delivering turnover growth of 7% to £5.5m with operating profit remaining at the same level as the
first  six  months to September 2008, come following significant investments in the business.  The
results  of these investments are already beginning to show through and our order intake  for  the
period  is slightly ahead of the same period last year. We have also seen excellent growth in  our
recurring revenues which demonstrates our success in developing our managed services offering.

During  this  period, when the downward pressure on margins has been significant, your  board  has
continued  to  focus on the delivery of key solutions to our customers around business  efficiency
and  'Spend  to  Save'. Your board made a decision to manage the overheads tightly as  is  prudent
however  we  also  planned to sacrifice some short-term profitability to  enable  us  to  continue
investing in the business for the future. We believe that it is important to ensure that we employ
the  highest  skilled personnel in the industry and, given the general economic outlook,  we  have
been able to attract talent in abundance that would not have been possible in a different economic

In  January this year two new executive directors joined the company and by the end of this period
we had recruited a further 10 members of staff in sales and technical roles. We are convinced that
despite our increased costs we have a team that can move the business forward at pace now that the
worse of the economic downturn appears to be over.

We  have  made  significant investments in our internal infrastructure with High Definition  Video
Conferencing  now  used to reduce travel costs and increase the efficiency of our  executives.  We
have also invested in upgrading our demonstration suites as well as increasing our marketing spend
to  ensure  that our world class business solutions and successful implementations are  publicised
and  recognised in our marketplace. This infrastructure investment has increased the cost base  by
over  £100,000 during the period and we believe that this was a necessary step change in  cost  in
order to facilitate the next phase in our growth strategy.

I  am  confident  that  our  credentials as a leading innovative systems  integrator  and  managed
services  provider, and our highly respected accreditations with our strategic vendors,  give  the
business a solid platform for future growth.

Paul  Sweeney, your Managing Director, has assembled a formidable Sales, Technical and  Operations

David  Hutton,  the  Sales  Director, has been able to recruit  a  number  of  mature  and  highly
experienced  sales  professionals  who  have already shown their  abilities  in  selling  business
efficiency solutions.

Andy  Barrow heads up a highly talented and well-balanced Technical and Pre-sales consultancy team
and we are confident that the recent investments and additions to this team will serve us well  in
the coming 12 months.

Richard  Gascoigne  has brought both organisational skills and new discipline  to  the  Operations
function. The significant investment of both time and resources brought about a successful ISO9001
quality  accreditation  following our Cisco Gold Partner Accreditation. These  two  accolades  are
already  bringing  major  benefits to your business and further strengthen  our  managed  services

Finally,  our  Finance team, led by Chris Malthouse, has been re-shaped and whilst  cost  controls
have  been implemented through excellent housekeeping, they have still managed to allow the  board
the freedom to invest for the future.

I  am  grateful  to the Senior Management team and their staff for the hard work,  dedication  and
professionalism  they  have displayed in driving the business forward even  during  the  difficult
times we have experienced this last year.


The  major  achievement this year was being invited onto the Cisco UCS (Unified Computing  System)
Advanced Technology Program. This provides us with a significant competitive advantage within  our
key  focus  area  -  the  'next generation data centre'.  To be listed alongside  Dimension  Data,
Computacentre,  Logicalis and BT as one of only five partners in the UK to attain the  specialised
accreditation  is a major achievement in itself. It proves that technical excellence  and  quality
delivery are imperative if we are to compete at the highest level. To further enhance our  product
offering, we have recently signed up with two new partners, RSA and Datacore.

We have continued to invest valuable time with our vendors in order to strengthen our position and
ensure  that we continue to adopt the 'best of breed solutions'. In April, we officially became  a
NetApp  Gold  partner and are now well on course to become a NetApp Platinum partner.  This  would
mean  ANS  Group would be the first partner to go from Gold to Platinum partner within a  calendar

ANS  Group  was named as the 'Manchester Evening News Business of the Year.' This is a  tremendous
achievement for the Company and the staff, and through the regional PR surrounding the event, this
has  further  raised the Company's profile in the North West Region. We believe  this  recognition
will  help  us  on  our way to becoming the Leading IT Solution Provider in the North  West.  Your
Chairman,  Scott  Fletcher, also walked away with another award, this time from EN  Magazine,  who
named him Technology Entrepreneur of the Year.


The  increase in turnover of 7% to £5.5m shows the determination to grow the business in difficult
times  whilst  still  focussing  on profitability. This growth has  been  partially  offset  by  a
reduction of about 1.5% to 31.9% in gross margin. This has been mainly due to the hardware product
margins  being placed under severe competitive pressure whilst service margins have held up  well.
Overall, I am pleased that we have still managed to grow our Gross Profit by 2% in absolute terms.

Recurring  revenues  have continued to grow and now represent about 50% of the  gross  margin.  In
addition  to  this, the average length of contracts also continues to increase with virtually  all
contracts running for a minimum of 12 months and extending up to three years.

Despite  the  sizeable  investment of £138,000 during the period  in  people,  infrastructure  and
marketing,  the  overhead  increase has been limited to 3% with a  number  of  efficiency  savings
reducing the net effect of the sizeable investments. Some of this investment is likely to continue
and  we are already seeing immediate and positive returns through increased sales activity and  an
increased order pipeline.

Operating  profit  has  remained steady at £379,000 which, given  the  investments  made  and  the
economic environment, is an excellent result.

Profit before tax has fallen £43,000, due mainly to lower interest receivable. Interest rates  are
likely to remain low in the short term; hence we will continue to seek alternative higher yielding
investments.  The  £91,000 profit on disposal results from the Company's  investment  in  Viapost,
which it acquired and disposed of during the period.

I  am  pleased to report that, despite the continuing recession, the business has grown  its  cash
reserves  from  £1.5m to £1.6m during the period after spending £243,000 as part of the  Company's
ongoing policy of buying back its own shares.


The  Board  is  pleased to announce that the interim dividend will be maintained  at  1.25p  (2008
1.25p).  The dividend will be paid by 31 January 2010 to those members on the register  as  at  18
December 2009.

The  Board  continues to monitor the level of cash required for operations and to  fund  strategic
acquisitions  and the future dividend policy will be kept under review in the light   of  forecast
cash requirements.


Although these tough trading conditions continue to challenge us, we believe that the worst is now
behind  us and I have the confidence that we can continue to buck the trend through to the end  of
the financial year. I can promise that from the Board down, every member of the ANS workforce will
give  their  total  commitment to get through this downturn with the best possible  results  being
achieved.  Through  the  high  levels  of  investment in  talent,  infrastructure  being  upgraded
constantly  to  provide a platform to deliver our growth alongside our £1.6m of cash  reserves,  I
have  the  confidence that the business is in the right shape to succeed. We are  seeing  positive
returns  from  the  recent investments, and the continued focus on growing our recurring  revenues
through our fast developing managed services. We believe that we are nearing the end of one of the
longest  downturns in history, and the Company is extremely well placed to take advantage  of  the
upturn when it comes.

 UNAUDITED PROFIT & LOSS                     6  MONTHS TO  *6    MONTHS
                                             30/9/09        TO   30/9/08
                                             GBP           GBP
 TURNOVER                                    5,499,224     5,142,064
 Cost of Sales                               3,744,620     3,422,522
 Gross Profit                                1,754,604     1,719,542
 Administrative Expenses                     1,376,070     1,339,630
 OPERATING PROFIT                              378,534       379,912
 Profit On Disposal of Investments              91,177       104,000
 Interest Receivable                            26,030        54,573
 Interest Payable                                    0             0
 TAXATION                                      495,741       538,485
 Taxation                                     -108,662      -123,852
 TAXATION                                      387,079       414,633
 Earnings per ordinary share                       3.2           3.5
 Diluted earnings per ordinary share               2.9           3.1
 UNAUDITED BALANCE SHEET                                   
                                             AS AT         AS AT
                                             30/9/09       30/9/08 
                                             GBP           GBP
 Fixed Assets Including Goodwill             1,165,016     1,139,860
 Current Assets                              5,030,875     4,016,860
 Current Liabilities                        -3,743,408    -2,887,875
                                             2,452,483     2,268,845
 Share Capital                                 119,608       126,363
 Reserves                                    2,332,875     2,142,482
 Shareholders Funds                          2,452,483     2,268,845

The Directors of ANS Group Plc are responsible for the contents of this announcement.


ANS  Group  Plc                                                      Tel: 0161 227 1000
Scott Fletcher, Chairman

St Helens Capital Partners LLP                                       Tel: 020 7368 6959
Duncan Vasey or Mark Anwyl

MC2                                                                  Tel: 0161 236 1352
Claire Tennant

*The figures for the six months 30 September 2008 represent the consolidated results of ANS Group. 
 The company is not required to consolidate its results for the six month period to 30 September

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